Health Insurance

Obamacare effect: Uninsured rate hits record low

How low can this go?

The percentage of people without health insurance in the United States has reached a record low number as Obamacare programs continue signing up new enrollees.

During the last quarter of 2014, an average of 12.9 percent of adults lacked health-care coverage, according to data released Wednesday by Gallup.

That was a drop from an average of 13.4 percent during the prior quarter—and represents a 4.2 percentage-point drop in the year since Obamacare exchanges began selling private insurance plans, according to Gallup. The current level is the lowest since Gallup began tracking the number of uninsured through continuous surveys in 2008.

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The drop has been most pronounced among black Americans and lower-income adults, the research organization said. Blacks have seen a 7 percentage-point decrease in their uninsured rate, while there has been a 6.9 percentage-point plunge in the rate among people earning less than $36,000, Gallup said.

And while Hispanics remain the ethnic group with the highest rate of people without insurance—at 32.4 percent—they have seen a 6.3 percentage-point reduction in that rate since the end of 2013. The steepest decline in the uninsured rate came in the first half of 2014, in the months leading up to a mid-April deadline for signing up for private insurance coverage.

While the launch of the government-run health exchanges in late 2013 is responsible for some of the decreases in the uninsured rate—about 6.7 million paying customers have enrolled as of last fall—another big reason for the continued drop has been the expansion of Medicaid eligibility in more than half the country.

Currently, 27 states and the District of Columbia have adopted the Obamacare program of allowing nearly all poor adults to enroll in Medicaid, the government-funded health coverage program. The remaining states have much tighter restrictions. However, a number of other states are actively considering expanding Medicaid eligibility, which would bring down the uninsured rate even further.

Medicaid enrollment is year-round, but open-enrollment in private insurance plans sold both on the government-run insurance exchanges and outside of those marketplaces only is running from Nov. 15 to Feb. 15.

Gallup's report noted that further reductions in the uninsured rate could come this year from Obamacare's so-called employer mandate, which starts taking effect in 2015. That mandate requires employers with 100 or more workers to offer affordable health insurance options or face a potential financial penalty. Next year, the mandate will cover employers with 50 or more workers.

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Officials this week are set to release updated enrollment numbers from, the federally run exchange that sells individual insurance plans in the 37 states that are not operating their own Obamacare exchange this year.

A week ago, officials said that as of Dec. 26, almost 6.5 million people had signed up in a plan or had been automatically re-enrolled in the plan they had in 2014. More than 600,000 other people had signed up for plans sold in one of the 14 exchanges operated by the District of Columbia and individual states, with an unknown number having been automatically re-enrolled.

The tallies reflected a surge of sign-ups that came from people who wanted to meet deadlines in December for enrolling in coverage that would begin Jan. 1. Experts expect another surge before the Feb. 15 open-enrollment deadline.

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Under the Affordable Care Act, most Americans must have some form of health insurance by that date or face a tax penalty equal to as much as 2 percent of their adjusted gross income.

Officials have said that about 87 percent of customers who are enrolled in 2015 plans will receive federal subsidies, or tax credits, to help pay for their monthly premiums. Those subsidies are available to people who earn one to four times the federal poverty level, and in many cases can significantly reduce the cost of insurance for enrollees.

The federal poverty level is $11,670 for an individual and $23,850 for a family of four, in the 48 contiguous states, and is higher in Alaska and Hawaii.

Over a similar period during enrollment last year, 80 percent of enrollees were found eligible for premium subsidies.

People speak with an agent as they discuss plans available from the Affordable Care Act in the Mall of the Americas in Miami.
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The legality of that financial assistance is being challenged in a case that will be heard by the Supreme Court in March.

Plaintiffs in that case claim customers are not eligible for financial assistance because the text of the ACA does not explicitly authorize subsidies for enrollees on a federal Obamacare exchange. Instead, the ACA explicitly authorizes subsidies for state insurance exchanges. Also in peril are subsidies to cover out-of-pocket costs for customers of who earn less than 2½ times the federal poverty level.

The Obama administration has repeatedly said it believes the subsidies are legal, and that it will prevail in the case. However, Health and Human Services Secretary Sylvia Burwell has been mum on the question of what, if anything, the federal government will do if the federal exchange's subsidies are ruled illegal.